Body corp raises $100k leaky building levy to be paid in 3 months !!!!

[Keithw]

I need some consoling / advice/ ideas/ reccomendations for help financing leaky building, Auckland city fringe apartment block, currently rented.

Leaky case under way (has been for the last 3 years !) but probably at least another year way before mediation likely.

Body Corp has decided to proceed with repairs & levied $3.2 mil over 3 years for the whole complex- first installment due Nov 09.
My share $100k in Nov !!!

Banks not interested in supplying any funds for leaky buildings.

Body Corp dominated by some "Well to do" owners who have money in bank and can't understand that it is impossible rasing funds right now.

Body corp determined to bankrupt owners that don't pay- for whatever reason.
Hardline Body Corp Secretary claims its for the "Common Good"

Some other owners seem to have similar issues obtaining finance

Building won't be worth what I paid plus leaky repair costs, for many years to come, so will end up with a building that costs way more than its worth, probably even after maybe an 80% payout on the leaky case.
Will have no tenants to pay mortgage during the repairs so risk mortgagee sale at that point if it hasn't already been forced by Body Corp
Currently negatively geared, which will of course get worse
Ownership is LAQC

any ideas ?

[alhoon]

Sorry to hear your situation, I have no advice on financing for you but I have a few questions.

If your first instalment is 100k how much is the whole thing going to cost?
Have you had a look at what needs doing yourself?
Do you know who’s doing the fixing?

A job we just finished, they were quoted around 120k for a four bedroom house from one of the so call specialist leaky companies to just repair it. We reclad it in wooden weatherboard, new double glazed windows, new carport and made a huge bifold in the lounge for around 80k.

To me there seem to be a lot of people getting screwed from both ends with this leaky house stuff.

Allan

[eri]

ouch!
which building?

[Keithw]

If your first instalment is 100k how much is the whole thing going to cost?

Over $360k for repair of my units plus legal $50 -60k !!!

Have you had a look at what needs doing yourself?
Do you know who’s doing the fixing?

Its a Body Corp thing - I couldn't do it even if I wanted to.
Yes I have made sure I was present when the destructive testing was taking place (Alexander & co) & there's some nasty rotten timber woodfibres left inside "plaster beams" where there used to be timber !!

A job we just finished, they were quoted around 120k for a four bedroom house from one of the so call specialist leaky companies to just repair it. We reclad it in wooden weatherboard, new double glazed windows, new carport and made a huge bifold in the lounge for around 80k.

To me there seem to be a lot of people getting screwed from both ends with this leaky house stuff.

Allan

tell me about it !!!!
the biggest gravy train since the Waitangi Tribunal

which building?
42 St Benedict St

[donna]

Wow that puts our small $5K payout into perspective. We had 3 monthly payments too. It was to fix sealing on windows, sliding doors, and rusting balcony rails on a 9 floor apartment block in South Melbourne. Our share was just the $5 K.

There's a few mortgage brokers on here so it will be interesting to see if there is a way to fund it for you Keithw.

Cheers,

Donna

[Tan]

Are there about 30 owners there? Is it possible to get those who can't pay together into a group and come up with some solution? I would assume the bulk of owners would have trouble complying.

Maybe one or more of the rich ones will act as a bank where necessary.

Why are those "well to do" owners dominating the Body Corp? Is this due to the rest letting them by their absence at meetings, or that they own bigger chunks of the building? They are not a large portion of the owners surely.

Is there any chance of putting off the repairs (or at least the bulk of them) until after the mediation hearing? That is ages away, isn't it. No wonder everyone is so stressed when it takes years.

[Keithw]

We have a meeting with Lannoch to see if their way of funding body corps can work.
Anyone else had any dealings with them ?

The original plan was to go as far as getting the tenders, so we knew the likely cost. then make a decision when to go ahead at that point. (ie wait for mediation, or look at how to raise funds & begin repairs on a part of the complex to get a more definite view on the hidden damage)
That idea somehow got hijacked by the legal side insisting that there is a high risk of settling on a sum & finding out the hidden damage will cause costs to rocket.
Easy for them & the Body Corp Secretary to say "just levy the owners & get started" with no regard as to how the money would be raised, (as they drive off to their ivory towers in their Porsche or whatever).
The levy suddenly got instigated at an EGM where few were attending - it was supposed to be a tender update meeting, levies were not on the agenda.
First we knew about it was from reading the minutes & a few weks later the bills arrived !
A lesson in attending ALL EGM.
An EGM a month later certainly brought out a whole lot of those who had not attended until then !

[Tan]

I'm not sure they can just spring a previously unannounced resolution like that on you.

See http://www.legislation.co.nz/act/pub...t+Titles_resel

It cannot be regarded as minor (which seems to be $30). Were 3/4 of unit holders represented - in person or by proxy?

Also, bear in mind that you want to get this sorted quickly, as if you owe money you will lose some voting rights.

[Keithw]

I have just been trawling thru that Act but havn't found anything specific yet. were you referring to any specific clause ?

no, 3/4 unit holders not present according to the minutes, looks like maybe 17(incl proxies) out of 30 (maybe out of 25 if you discount those with unpaid levies)

[artemis]

There will be a set of Rules for your BC, which you should have and if not can request. Schedule 2 of the Unit Titles Act sets out which changes to the rules must be unanimous. If changes have not been made (or were in the original rules I guess) then Schedule 2 applies. There is specific provision there re meetings and special resolutions. Sounds like the resolution may not be lawful (depending on what is in the Rules).

[Tan]

33
For the purposes of these rules a special resolution means a resolution proposed at a general meeting of the body corporate of which at least 14 days' notice specifying the intention to propose the resolution as a special resolution has been given.

34
Where a resolution is proposed as a special resolution, the vote of the meeting shall be taken in the same way as if it had been proposed as an ordinary resolution and a poll had been demanded:

Provided that a special resolution shall be deemed not to be carried unless persons entitled to exercise not less than three-fourths of the value of the votes and not less than three-fourths of the number of votes exercisable in respect of all the units vote in favour of it.

Although 14 days notice was not given for the resolution, it was for the meeting, and should have been for the resolution.

[Keithw]

I saw that bit, but didn't think that applied as the resolution was recorded in the minutes as a normal resolution, not a special resolution.
There again I haven't been able to find the definition of a special resolution & the rules don't define it. The rules are silent as to what requires 3/4 unit holders & what doesn't.

Am happy to post a link to the rules PDF if anyone is interested.

[eri]

what about the quorum requirement for the EGM?

and i wouldn't have thought that you could call an EGM and pass resolutions that weren't on the table beforehand....

who do you know that has and understands robert's rules?

not saying it is the same thing but huge costs shouldn't be voted in at an EGM unless it was very clearly spelled out in the notice of the EG

[Keithw]

Definitely a quorum present.

No mention at all about possible additional levies in the circulated agenda.

[mortgage broker]

Keithw I know you probably are, but if you are not, become very involved with the body corp and insist the other owners who share your view attend the meetings. You maybe able to delay this.

Think about how much this will cost and how long it would take to save this amount. If you do not have other properties and or assets to raise finance against, talk to an accountant about bankruptcy, its down sides etc.